Gov. Bobby Jindal. (Associated Press)
Last Modified: Friday, December 14, 2012 5:51 PM
BATON ROUGE (AP) — Gov. Bobby Jindal's chief financial adviser on Friday announced a mix of cuts, one-time patches and hiring-freeze savings to close a nearly $166 million budget gap, with money slashed from hospice care, mental health treatment and domestic violence programs.
Doctors and hospitals that care for the poor, disabled and elderly in the Medicaid program will be paid less for those services. Dental benefits to pregnant women through Medicaid will be shuttered. Additional cuts will fall on the LSU hospitals that care for the poor and uninsured in north Louisiana.
Money for state parks is being reduced. Dollars for juvenile justice treatment programs are shrinking. Funding for an early childhood mental health program was cut.
Public colleges will be hit with a $22 million drop to state funding. The Jindal administration said the cut should not be a problem because the schools brought in more tuition than expected and saved millions with a hiring freeze, but Louisiana's top higher education leader said campuses will have to make reductions to close the gap.
Commissioner of Administration Kristy Nichols detailed the plans to the Joint Legislative Committee on the Budget. The cuts and financing changes will rebalance the $25 billion budget for the fiscal year that ends June 30.
It was the fifth year in a row that the state has had to close a midyear budget deficit.
"How low can we go? We keep reducing, reducing," said Sen. Francis Thompson, D-Delhi.
He asked Nichols: "Are we going to be able to efficiently run these departments based on these revenues in your opinion?"
She replied that the Jindal administration is balancing critical needs with available money.
"It is our responsibility to make reductions and to balance the budget and to try to the best of our ability to limit the impact that that has on the patients and clients of these agencies," Nichols said.
This year's budget gap was tied to a $129 million cut in the state's income forecast, with less revenue expected from sales and individual income taxes. Also, the state's funding formula for public schools and the state's free college tuition program known as TOPS were short of money needed to cover all students, Nichols said.
The slashing could have been deeper, but the Jindal administration used dollars from legal settlements with drug companies, savings from the closure of Phelps Correctional Center in Southwest Louisiana prison and a state self-insurance fund to help fill gaps. Nearly $20 million was saved from a hiring freeze.
As many as 63 state government workers are slated for layoffs under the plans.
The deepest cuts to services were made in the health and social services departments. Lawmakers worried about the effect of continuing to slice funding to the services for Louisiana's most vulnerable populations.
"These two departments deal with some of the most fragile in our state and serve as a safety net in many aspects of their lives," said Sen. Sharon Broome, D-New Orleans.
Health care providers said the rate cuts for doctors and hospitals who take Medicaid patients threaten the viability of the program and the low reimbursement for Medicaid services could force hospitals and doctors to charge other patients more.
John Matessino, president of the Louisiana Hospital Association, said hospitals have taken repeated budget hits and can't continue to absorb reductions without limiting services.
"It's getting to be kind of like death by a thousand cuts," he said.
The biggest complaint from lawmakers was over the elimination of at-home, end-of-life care through the hospice program for people who can't afford private insurance coverage.
"We're not going to assist them with services for people who are on their death beds?" asked Sen. Dan Claitor, R-Baton Rouge.
Nichols said 80 percent of the hospice services are provided at nursing homes and wouldn't be lost. She called the elimination of the program a tough decision.
Senate Finance Committee Chairman Jack Donahue, R-Mandeville, asked her to find another way to trim spending.
In other areas, Lt. Gov. Jay Dardenne said the $4 million drop in funding to state parks will drain all park maintenance money and leave him with nothing to repair Hurricane Isaac's damage.
"It's putting the parks in great jeopardy," Dardenne said.
Public colleges, which have seen $427 million in state funding stripped from their budgets since 2008, will add another $22 million in cuts. While Nichols said savings and tuition hikes will offset the reduction, Commissioner of Higher Education Jim Purcell didn't agree the cuts would be painless.
"I have spoken to the system leadership and they will work with their campuses to minimize the impact these cuts will have on instruction and student services," Purcell said in a statement.